In case this helps someone else sometime:
After installing a hotfix, (7.0.2 FP2 HF243), offline command line functions such as ncompact, nfixup, etc. would all return the same error - Notes Error: 0x1A5
Turns out the hotfix added a 3 line notes.ini file into the executable directory instead of updating the notes.ini file that we have in the data directory.
Copying the 3 lines from the new file to the real notes.ini file, then removing the new file resolved the issue.